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Russia Returns To Africa – Analysis

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The inaugural Russia-Africa summit in Sochi in October is President Putin’s way of proclaiming a new phase in Russia’s relationship with the continent while increasing its relevance among countries with an established presence. The aim is to strengthen cooperation in the nuclear power, mining and security sectors.

By Shaantanu Shankar*

In October 2019, the first Russia-Africa Summit will take place in Sochi. Leaders from all 54 African countries have been invited to the summit, which, in scale and significance, is like the Forum for China-Africa Cooperation and the India-Africa Forum Summit. The summit has been in the planning for several months under the personal supervision of President Putin, and is a clear announcement from him: Russia is back in the African continent after a long absence – since the Soviet Union’s dissolution in 1991.

Russia has stiff competition for Africa’s attention. In addition to the long-standing investments of the United States and Europe, China and India have been expanding their economic and military footprint since 2000. The Russian engagement is not so different – a focus on mineral resources, nuclear-led energy cooperation and a provider of both arms and strategic advice. But Russia is clearly reviving the old role the Soviet Union played as a dominant security provider in several African countries.[1] This time, in addition to arms sales and military cooperation, Russia has included a strong component of economic cooperation, with investments in nuclear power, mining and metallurgy, oil and gas.

By far, nuclear power comprises Russia’s biggest outlay in Africa. The largest project is state-owned Rosatom’s 4.8 GW El Dabba nuclear power plant in Egypt, which began in 2015 with an investment of $30 billion.[2] Once completed in 2025, Rosatom will run the project with its Egyptian partner, Nuclear Power Plants Authority, for 10 years, after which it will transfer to Egypt. A similar model is being replicated in other countries as well. In 2016, Nigeria signed an agreement for installing 4.8 GW of nuclear power over the next two years, which will help fill Nigeria’s 7 GW power shortfall.[3]

This is part of the Russian Ministry of Foreign Affairs’ aggressive promotion of nuclear technology and infrastructure, an area in which Russia has surplus industrial capacity, technical knowhow and uranium supply. In fact, approximately 37% of Rosatom’s revenue comes from exports of nuclear infrastructure and technology, which it plans to increase to 60% by 2030. Africa is essential for the realisation of this objective.[4] Rosatom’s investments run deep; they include research and development partnerships in nuclear power with Egypt, Ethiopia, Nigeria, South Africa, Sudan and Tanzania.

In just four years, Rosatom has replaced former French conglomerate Areva as the leading provider of civil nuclear energy in Africa, signing at least 22 MoUs and inter-government agreements with 13 African countries.[5] One good reason for this: Rosatom reactor designs cost less than half that of similar products from Areva and U.S. majors, GE-Hitachi and Westinghouse.[6]

This is a valuable niche for Russia as there is currently limited competition for nuclear power in Africa. The continent is growing at 3% annually and is looking to develop its power industry. Despite being oil-rich, it lacks technology and funds for developing its power sector, which makes Russia a welcome partner.

Russian firms have also made forays in mining and metallurgy, investing in the extraction and processing of manganese, gold, nickel, platinum, diamond and aluminium. In 2015, a Russian consortium, consisting of Viholdings, Rostec and Vnesheconombank, invested $3 billion in Zimbabwe’s Darwendale platinum mines.[7] And since 2007, petro majors, Lukoil, Gazprom and Rosneft, have entered exploration and extraction of oil and natural gas fields in Algeria, Egypt, Ghana and Nigeria.[8]

Strategically aligned with commerce is defence. Russia has been intensifying its military cooperation in Africa since 2015, and since 2010, is the leading supplier of military goods and technologies to Africa. Russia exports more than 37% in armaments to the continent, followed by the U.S., France, China and Ukraine. China has increased its own share of arms supplies to Africa, and is the second largest supplier after Russia in Sub-Saharan Africa.

Table 1: Top Five Arms Suppliers to Africa

SupplierShare in Arms exports
Russia37.6%
United States16.3%
France14.6%
China9.2%
Ukraine4.1%

Source: SIPRI

Table 2: Top Five Recipients of Russian Arms Exports in Africa

RecipientShare in Imports
Algeria58.64%
Egypt25.96%
Uganda5.17%
Sudan2.63%
Angola2.11%

Source: SIPRI

At one level, Russia’s commercial expansion in Africa is not very different from China’s state-led approach in the continent – large capital expenditures by government corporations with ministerial direction and sponsored credit. Investments predominantly take place through mergers and acquisitions and joint ventures with African public enterprises. However, Russia also jointly invests with African public enterprises – and with international companies already operating in Africa.

In return, as with China, Africa supplies Russia with 87% of its manganese and 16% of its chromium, vital for Russia’s domestic industrial value chains in nuclear power, aeronautics and petrochemicals. Propelled by surges in Russia’s mineral and agricultural imports and exports of wheat, refined petroleum products and steel, bilateral trade has almost tripled from $7 billion in 2010 to $20.4 billion in 2018.

Russia has entered into several counter terrorism agreements with African countries, where Islamist terror groups such as Al Shahab and Boko Haram have sworn allegiance to the Islamic State of Iraq and Syria (ISIS). Russia has its own concerns about ISIS as recruits from its Islamic majority regions, Chechnya and Dagestan, have fought alongside the group.

In addition, the U.S.-military scale-back and the increasing presence of ISIS fighters in Central and West Africa – more than 6,000, according to the Combating Terrorism Centre – have pushed African countries towards Russia,[9] which is providing counter-terrorism training, arms and advice. Around May 2018, the Central African Republic appointed a Russian national, Valery Zakherov, as its National Security Advisor, and this year, the Republic of Congo signed a bilateral agreement, facilitating the deputation of Russian military advisors to its forces.

This has translated into a stronger military partnership, with Russia signing military cooperation agreements with 21 African countries since 2015, and the possibility of establishing military bases in the Central African Republic, Egypt, Eritrea, Madagascar, Mozambique and Sudan.[10]

Like the U.S., the presence of Russian private military companies run parallel with its armed forces. Companies like Wagner Group and Patriot Group facilitate military operations and protect private investments which Africa’s capacity-constrained official security forces cannot.[11]

African security institutions welcome the comprehensive re-engagement of Russia. In October 2017, Russia’s Permanent Representative to the United Nations, Vasily Nebenzya, highlighted Russia’s role in assisting law enforcement agencies and building military capacities of the Regional Counter-Terrorism Alliance, G-5 Sahel, comprising the West African nations of Burkina Faso, Chad, Mali, Mauritania and Niger. Ironically, the G5 Sahel was established by France in 2014 and supported by the U.S. Naturally, these countries have criticised Russia’s security presence.

However, they have not criticised its commerce and industry. U.S. and EU sanctions since 2014 have targeted Russian business networks globally, but in Africa, they collaborate. Russia’s international business partners in Africa include companies from Brazil, Italy, Norway, South Africa, UK and the U.S. This has ensured the steady growth of its business on the continent.

India’s familiarity with, and experience in, working with Russian firms, especially in nuclear power and defence, is an opportunity for Africa. Indian engineering firms can win maintenance contracts for Rosatom’s nuclear power plants. Many African countries use older Russian military equipment, which India has the expertise to service and upgrade. India can also partner Russia and Africa in the research and development of niche sectors like nuclear power and space.

Table 3: Russian investments in mining and metallurgy in Africa

CompanyHost CountryIndustryType of InvestmentShare (%)
NornickelSouth AfricaNickel, copper, cobalt, chromium, Platinum Group MetalsJV with African Rainbow Minerals50%
RenovaSouth AfricaManganese Mining (4th largest in the world)United Manganese of Kalahari – JV with Majestic Silver Trading49%
RusalNigeriaAluminium mining and processingAlscon – JV with Government of Nigeria80%
GuineaAluminium mining and processingFriguia production complex100%
AlrosaAngolaDiamond MiningCatoca Ltd. Mining Co. – JV bw Alrosa, Endiema, Odebrecht and Diamond Finance CY BV Group32.8% – operator
AngolaDiamond MiningLuemba Mining Company – operated by Catoca Ltd. Mining Co.32.8 %
BotswanaDiamond explorationSunland Minerals – JV bw Alrosa and Botswana Diamonds PLC50%
ZimbabweDiamond explorationTechnical Cooperation with DTZ–OZGEO (Zimbabwe) – Could be upgraded to JV for production stage
NorgoldGuineaGold Mining and ProcessingLefa Mine100%
Burkina FasoBissa and Bouly Mine – with Government of Burkina Faso90%
Burkina FasoTaparko Mine – with govt. of Burkina Faso90%
RostecZimbabwePlatinum Group MetalsDarwendale Mine – JV bw Zimbabwe Mining Development Cooperation and Russian consortium OJSC Afromet (Vi Holdings, Rostec, Vnesheconombank)50%
RosatomTanzaniaUraniumMkuju River Project – Ownership of Uranium 1 (Canada)
Vi HoldingsSierra LeoneAluminium miningSierra Mineral Holdings Limited – JV with Vimetco, Alro SA (Romania)

Source(s): Company Websites

Table 4: Russian Investments in Oil and Natural Gas

CompanyHost CountryActivityBlockRussia Share (%)Partners
LukoilNigeriaOil explorationOML-140 Nsiko Oil Field18%NNPC (Nigeria) – 30%
Star Ultra Deep Petroleum (Chevron USA) – 27 %
ONG – 25 %
GhanaOil explorationDeepwater Tano/Cape Three Points Project38%Aker Energy (Norway) – 50 %
Ghana National Petroleum Corporation (Ghana) – 10 %
Fuel Trade (Ghana) – 2 %
EgyptOil explorationWEEM Extension50%Tharwa Petroleum (Egypt) – 50 %
Oil productionMeleiha24%ENI (Italy) – 76 %
Oil ProductionWest Esh El Mallaha100%JV with Esh El Petco
GazpromAlgeriaOil exploration and productionEl Assel Onshore49%Sonatrach(algeria) – 51 %
NigeriaGeological SurveyingGeodata Technical Services Limited51%Gepkinetik (Nigeria) – 49 %
RosneftEgyptNatural Gas ProductionZohr Gas Field30%Eni (Italy) – 60 %
BP (UK) – 10 %
MozambiqueNatural Gas ExplorationA5-B Angoche Basin
Z5-C Zambezi Delta
Z5-D Zambezi Delta
Exxonmobil Exploration (USA)
Production Mozambique Offshore Limited

Source(s): Company Websites

Table 5: Overview of Rosatom’s agreements with African countries

CountryYearAgreement Details
Egypt2008IGA on the peaceful use of nuclear energy
2015IGA on the key commercial terms of a project to build Egypt’s first nuclear power plant
2017Preliminary contracts for construction of El Dabaa Nuclear Power Project project – 4.8 GW
Nigeria2009Cooperation agreement with Nigeria, including provision for uranium exploration and mining in the country.
2012IGA on cooperation for ‘the design, construction and decommissioning of nuclear power plants
2017Agreement on construction of Research Reactor
Agreement on construction of nuclear powerplant
South Africa2014IGA on strategic partnership and cooperation in the sphere of nuclear energy and industry
2015Memorandum on cooperation in training personnel for the South African nuclear power industry
Memorandum on cooperation in Enhancement of Public Awareness of Nuclear Energy in South Africa
Ethiopia2017MOU on the peaceful use of nuclear energy
2019Roadmap for establishing cooperation on the construction of a nuclear power plant (NPP) and a Center for nuclear science and technology (CNST)
Ghana2012MOU on the peaceful use of nuclear energy
Kenya2016Memorandum of mutual understanding and cooperation in the field of peaceful use of nuclear energy
Sudan2017Agreement on the development of NPP construction project in Sudan
2018MoU on cooperation on the personnel training in the field of nuclear energy of the Republic of the Sudan
MoU on the formation of positive public opinion on nuclear energy in the Republic of Sudan
Zambia2016IGA on cooperation in the field of nuclear energy for peaceful purposes. and cooperation in the field of peaceful use of nuclear energy
Tanzania2016MOU for the peaceful use of nuclear energy
Uganda2017MOU on the peaceful use of nuclear energy
Namibia2017IGA on the peaceful use of nuclear energy
Rwanda2019Roadmap for establishing Russian-Rwanda cooperation in the peaceful uses of atomic energy was signed
Republic of Congo2019IGA concerning the cooperation in the field of the peaceful use of atomic energy

Source: Rosatom

*About the author: Shaantanu Shankar is Senior Researcher, Geoeconomic Studies Programme, Gateway House.

Source: This article was published by Gateway House

References:

[1] Giles, K 2013, ‘Russian Interests in Sub-Saharan Africa’, Letort Papers, US Army War College Press, pp. 3-5, <http://ssi.armywarcollege.edu/pdffiles/pub1169.pdf>

[2] Schepers, N 2019, ‘Russia’s Nuclear Energy Exports: Status, Prospects and Implications’, EU Non-Proliferation and Disarmament Papers, SIPRI, no. 61, < ttps://www.sipri.org/sites/default/files/2019-02/eunpdc_no_61_final.pdf>

[3] Nigeria Power Baseline Report 2018, Office of the Vice President of Nigeria, <https://mypower.ng/wp-content/uploads/2018/01/Baseline-Report.pdf>

[4] Annual Report 2017, Rosatom, <https://rosatom.ru/upload/iblock/29c/29c061878dad37c189db341648c964b3.pdf>

[5] See tables below for overview of Rosatom’s engagement in Africa’s nuclear industry

[6] Bhandari, Amit 2015, ‘Quiet burial for the nuclear deal,’ Gateway House, 5 November, <https://www.gatewayhouse.in/how-technology-can-cap-oil-prices/>

[7] Darwendale Project, <http://www.viholding.com/en/press_center/project_news/darwendale_project_news/>

[8] See tables below for overview of Russian investments in mining and metallurgy, and oil and gas

[9] Warner, J & Hulme, C 2018, ‘The Islamic State in Africa: Estimating fighter numbers in cells across Africa’, CTC Sentinel, vol. 11, no. 7, pp. 21-28, <https://ctc.usma.edu/app/uploads/2019/01/CTC-SENTINEL-082018-final.pdf>

[10] Hedenskog, J 2018, ‘Russia is stepping up its military cooperation in Africa’, Swedish Defence Research Agency Memo, <https://www.foi.se/rest-api/report/FOI%20MEMO%206604>

[11] Kwesi, A, Thomas, J & Samuel, A (2008), ‘The Role of Private Military Companies in US-Africa Policy’, Review of African Political Economy, vol. 35., no. 118, pp. 613-628, < https://www.researchgate.net/publication/247501066_The_Role_of_Private_Military_Companies_in_US-Africa_Policy>

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Gateway House

Gateway House

Gateway House: Indian Council on Global Relations is a foreign policy think-tank established in 2009, to engage India’s leading corporations and individuals in debate and scholarship on India’s foreign policy and its role in global affairs. Gateway House’s studies programme will be at the heart of the institute’s scholarship, with original research by global and local scholars in Geo-economics, Geopolitics, Foreign Policy analysis, Bilateral relations, Democracy and nation-building, National security, ethnic conflict and terrorism, Science, technology and innovation, and Energy and Environment.

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